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In the latest attempt to kill DTC, Senator Claire McCaskill (D-MO) tried to amend the Trump tax bill with an elimination of the tax deductibility of DTC as a business expense. It was defeated. This is the umpteenth time this tactic has been tried by Congress hostile to the drug industry.

I have lots of friends and relatives who are Democrats. I respect their right to think the drug industry charges too much and tries to create demand for drugs for diseases they advertise. Trying to limit the right to advertise lawful products, especially heavily regulated DTC advertising, is a huge mistake and creates a slippery slope. May I remind my Democrat friends that there are many categories of advertising that interest groups do not like.

Do we ban beer ads because drunk drivers cause accidents? Do we restrict ads for Mercedes because many people cannot afford them and feel bad? What about those violent video game ads? How about ads for violent movies? Somehow legislators have singled out drug ads for special treatment. Let’s deal with the common assertions about drug advertising.

Drug ads raise prices because critics point out that consumers eventually pay for those expensive ads. Sounds like a rationale argument but facts prove otherwise. Drug ads represent 1-2% of drug sales. We spent less than $100 million on Lipitor ads when sales were over $5 billion. No one ever mentioned advertising as a basis for pricing. Price is set based on a number of factors unrelated to advertising. What is competition charging? Are we first to market? How will pricing affect insurance coverage? How much patent life remains? What did we spend on development? How many markets worldwide are we in? The bottom line is we as an industry spend $5 billion on a revenue base over $400 billion. That is hardly an expenditure that would drive price up.

Drug ads create demand for products which are not needed. This is the second assertion usually made. Drug makers create disease awareness for ailments that are not a real problem say critics. Social anxiety, low testosterone, restless leg syndrome, are just some of the examples raised by critics. Critics also say advertised drugs are often no better than their generic alternatives. These are fair criticisms as there are people who turn to prescription drugs too quickly. I admit that. The issue is between doctor and patient to decide whether no drug, a generic drug, or the latest premium price drug will work best. Trying to ban commercial speech to prevent a patient learning about a drug is a bad solution to concerns about over use.

Like it or not, we are a country that believes in free markets and selling what we make. Having the right to advertise provides an incentive to develop new products. Some of these are bad products that we waste money buying, but that is the price we pay to have a free market. We would all save money driving a Chevy, wearing Walmart clothes, and buying generic groceries. That decision is left to consumers and not by government forbidding advertising for products they feel we should not buy. I know what the critics say. Drugs are different than other consumer categories. Life saving meds should not be marketed like perfume.

The critics forget that we need a drug industry that is anxious to do research and can get rich risking lots of money. Yes, we may not need all the me-too drugs being sold or advertised. Those drugs provide cash needed to take risks on new technologies. The next pandemic will one day be upon us and we better have a strong drug industry ready to find life saving drugs.

Time to have a little fun with the unknown. Predictions are nice for stimulating discussion so here goes.

1. The DTC spending will increase modestly in 2018 by around 5%. Some of that increase is media cost inflation. So, I am expecting a strong year but not a boom in spending.
2. FDA will not take any action in 2018 to make DTC harder or easier to execute. It is possible we could see a guidance on reducing risk presentation, but I doubt it.
3. The media mix will change slightly to include more digital and point of care, but television and print will still be dominant. FDA will do nothing to make social media easier to execute and will not change word search requirements on indication and needed fair balance.
4. Drug company reputation will still be an issue due to pricing concerns. DTC will be attacked regularly for causing demand for high price drugs and for creating higher prices. I am not predicting any Congressional action on price controls or reimportation but the mid-term elections in 2018 might alter the balance of control to Democrats and then something could happen in 2019.
5. Virtual medicine is going to become the next big thing. That means cheaper opportunities to interact with a doctor online for lower cost and get drugs prescribed. Married with online tools to track vitals and other useful diagnostic tools will accelerate the shift.
6. Genomics companies will continue to grow in offering tests to determine our likelihood of getting diseases. Consumers will be more informed and be more active partners in deciding with doctors what tests are needed and what treatments are best.
7. Consumer cost burden will continue to rise as insurers and employers continue to expect higher deductibles and co-pays. That means more of us are really self-insured in a normal year and we pay the full bill. That means consumers will be questioning any service, test, or drug where they are paying most of the bill.
8. Media targeting will be a higher priority as technology improves to micro target potential users. As DTC for higher cost drugs targeting smaller segments in cancer and other targeted diseases increases, the need to better target potential customers increases.

There you have it. 2018 will be a relatively quiet year as nothing should happen to dramatically alter how we use DTC. Just my opinion and many of you will have a different take on these and others not mentioned. Have a great holiday as this is my last column in 2017.

A week ago, my wife Debra broke her hip in a fall. The experience has given me a better appreciation of our health care system. While not perfect, I am impressed with the speed and quality of the care American style. That is, the for profit hospital was interested in her satisfaction as a customer. They were interested in making her happy, so they can be known as a customer centric facility. In today’s social media world customer ratings matter. They touted their ratings on billboards placed in their lobby from several sources such as Healthgrades and US News and World Report. They were aware that she may go to customer rating sites after her discharge and did whatever they could to ensure good feedback.

I frankly expected the typical poor hospital experience based on past interactions with emergency rooms and being admitted for surgery. The last time I was hospitalized was about 20 years ago. That experience was characterized by a diffident nursing staff, a cramped double room with a moaning roommate, and of course lousy food. Move ahead 20 years and everyone at this hospital was interested in ensuring a positive experience.

My underlying point in this is that those who advocate the federalization of healthcare may not like the result. I have had few positive experiences with government agencies. It is not that they are staffed by bad people, it is that they do not make customer service a priority. They do not have to. We have one choice for paying our taxes, getting our passport, getting through airports, and that is Uncle Sam. Sometimes he can be slow, unfriendly, rigid, and lacking in empathy.

In the case of my wife’s emergency surgery I had choices and could accept or reject the hospital and surgeon. Admittedly, once my immobile and in agony wife was brought in, we were kind of a captive audience. Still they knew she could request a move to another hospital and went the extra mile to ensure she stayed. My personal physician did not have privileges there so it was a serious consideration to move.

What I noticed most was the staff always asking if she was satisfied. This was from the ER nurses to the aides taking her meal orders. She felt like a valued customer rather than a burdensome patient. While she was anxious to get home she felt comfortable staying there. The lesson I learned was the enormous opportunities that still exist in healthcare to delight the patient. The hospital staff explained that all the rooms in the new wing were now singles because they knew patients valued their privacy. The visitors have free valet parking. Nice touches.

I know Bernie Sanders thinks government would do a better job running the healthcare system. Somehow I doubt single rooms and valet parking would be part of their plan. I also doubt customer satisfaction would be anywhere as a top priority. Yes, I am confident care would be adequate under a government run system. For my wife the stress of breaking her hip and going through emergency surgery was enough, and adequate care was not what we wanted. We wanted customer centric care and the for profit model provided it.

I thought about how much more we can do to unleash free market customer centric care. We can lower costs and improve care just by letting for profit companies compete. Profit and free choice are powerful motivators for innovation. We should encourage more of it rather than hope government is the solution. Just think the post office versus FedEx as the analogy. I know which I would choose.

The widely reported story that Amazon is considering entering the prescription drug market has made current drug sellers nervous. Could Amazon revolutionize drug sales? Or, would they just be another mail order supplier in a crowded market? The answer is unclear.

Amazon certainly has the strength to cut deals with drug companies, insurers and major employers to supply drugs. If a major insurance company wanted to work through Amazon to try to cut costs it is likely they could shave some expense. I do not, however, understand yet how Amazon would be able to fundamentally change drug delivery or pricing.

Drug companies have established a complex supply chain with numerous levels of prices across different customer categories. Drug companies have no problem quickly supplying patients through drug stores, mail order houses, or in store pharmacies at supermarkets/big box chains. While certainly a convenient place to shop its many product categories, are there advantages for customers buying their drugs there?

I have increasingly bought more things on Amazon because I get free delivery through Prime. Their service is reliable. It is nice to be able to buy directly from them or their listed sellers. That being said, Amazon is still just a giant online market. Patients already have a vast array of options filling their prescriptions and I never heard anyone complaining how hard it is to fill a prescription. Unless Amazon can significantly lower consumer price, or save insurers lots of money, then the game changing aspect of their market entry is unclear.

I love Amazon and was lucky enough to hold on to my 200 shares bought at $35 many years ago. As big a fan as I am of their company, to change how drugs are sold is not easy. Maybe all Amazon wants to do is be another online option and grab a share of the huge market. Certainly, they have an enormous customer base who would be happy to add drugs on with other purchases.

Of course, Amazon is an innovator and maybe they will be able to add consumer value to drug purchases. Perhaps they will be able to launch retention and compliance programs using their customer research base. Alternatively, they may be able to innovate in disease and drug education. Their major asset is consumer trust and that should never be underestimated. Amazon has a team evaluating entering the market and my guess is they will enter, even if just as an ordinary supplier at the start. Long term I suspect they are thinking of ways to shake up the supply chain to offer substantial discounts to their customers.

My question to the DTC community is why can’t we come together with FDA and make DTC advertising more understandable.

I am not talking just about risks but also benefits and indications. We are all letting the approved label dictate how we say what we say. That label information is generally not consumer friendly. Consumers see advertising, not as a whole sales pitch, but merely the start of a buying process. DTC, because of regulations, seems to be treated as requiring an entire pitch where virtually everything must be discussed. Look at cancer advertising for example on non small cell lung cancer. I’ll use Keytruda as an example which is required to say it is indicated if PD-L1 is positive and there are tumors with no abnormal EGFR or ALK gene. Huh? Merck has to say it but does any consumer know what any of that means? I doubt it.

What we have are technically oriented government regulatory bureaucrats in a non-technical DTC world. They should spend their time making sure everything said is true but also understandable. Instead of forcing Merck to discuss abstract qualifications on who might benefit, consumers would be better served knowing more about clinical results. Wouldn’t it be better to say Keytruda only benefits a segment of lung cancer patients and only your doctor can say if you might benefit? After all, patients do not self diagnose PD-L1 or their gene abnormalities.

FDA can make the 60 or 90 second ads much more consumer friendly and increase comprehension if they acted more like common sense regulators. They know many ads are data crammed and difficult to follow but it is their view that the label is like the Ten Commandments. Thou shall not deviate. So we get required language that is just wasting valuable air time that might be redirected towards giving consumers information they need and more importantly understand. I know Merck would probably like to do that. I also think OPDP would like it that way because I know the people there are trying to do right. Do we really think Congress intended consumer confusion in the 1970s when they wrote the regs never contemplating DTC?

Has OPDP pushed back on the Congressional committee regulating drug promotion that we need new promotional regulations? We can recognize that consumers just want mass media advertising to inform them that something might help them. They do not need the whole story rather just enough information to ask their doctor or search the Internet. Using the excuse that the regulations require all this complexity is abdicating the role FDA should have. We want drug DTC claim ads to be accurate and disclose serious risks. Surely, there is a better way. It will take FDA, Congress and drug makers to collaborate to determine how to improve. This is simple really and FDA should lead that effort.

Does anyone feel that we have done the proper job educating consumers when arcane medical terms are dominating DTC? Regulators tick off required boxes on their label checklist for DTC knowing full well consumers are often left clueless. My suggestion is OPDP have hearings on how to completely over haul DTC communication for today’s media environment, instead of using the excuse that they are captive to regulations written almost 50 years ago.

In what may be a major step towards reducing the litany of risks presented in DTC television ads, the FDA released their new study that shows that less risks presented is better for consumer comprehension and retention. While saying further study is needed, FDA cleared the way for perhaps eventually changing its guidance on the number of required risks presented. This study, originally posted for public comment in January 2015, saw the results published August 2017 in an online research journal.

FDA studied alternate risk disclosure in three categories for this study. Insomnia, depression, and high cholesterol were tested with reduced risk disclosure. While full details were not yet published the conclusion is that consumers remembered more when less was presented. We all know the current approach is not optimal because consumers get bombarded with so many risks and side effects, both in voice overs and on screen supers.

So here we are 20 years into DTC on television and we get the widely expected answer from the FDA study. While this study is better late than never the FDA says further research is needed. FDA would be wise to issue a new guidance soon giving drug makers the chance to reduce the number of risks and side effects. Consumers could immediately benefit by retaining more of the important information. I am even supportive of keeping the ads just as long with fewer risks discussed. Supers could kept on the screen longer and a slower voice speed could be used for discussing risks.

FDA has lots on its DTC research agenda, but this area of risk presentation is of major importance. Action should be a priority because consumers are overwhelmed with risk information under current requirements. The goal of all involved in DTC should be helping consumers get comprehensible risk information. The shortened risk requirement would help in achieving that goal.